As I’ve mentioned any number of times, my family lives in a smaller “starter” home. While it was the typical size of a single family home back in the 1960s when it was built, it’s considerably smaller than the typical home built in the last few decades by at least half.
Especially now, with so much uncertainty going on in the world, having a small mortgage gives us huge peace of mind. We lucked out by being able to purchase our home back in 2011 when the housing market was more affordable, but we purposefully decided never to buy up and out of our home. That choice has been a huge reason why we’ve been able to save so much of our incomes, and why we could get by on just one income now if we had to.
While there are times that we wish we had a bit more space, our 1,350 square foot home is plenty big enough for the four of us plus two large dogs, and big enough to throw dinner parties when we aren’t in the time of social distancing. And then, of course, our neighborhood is absolutely fabulous, which is worth so much more than a big, fancy home.
A while back, I asked in my Women’s Personal Finance Facebook group for women who were willing to share their stories on my blog. We have so many wonderful voices writing about personal finance, but I’m always looking for new ones. The narrative continues to be that men are the ones talking about money, and one of the big goals of this blog and that Facebook group are to show how untrue that stereotype really is.
Christy from Financially Fit Teacher reached out to me with an idea to write about her family’s small home, and I’m excited to feature her today. The norm in the United States and other parts of the world is still to buy the biggest home you can afford – and then trade up as soon as you can.
There are those of us who have made decisions different than the status quo, though, and I want to encourage people to think differently about what is expected. We may have smaller homes, but they allow us to afford a bigger, more financially secure life.
Small House, Big Life – Christy from Financially Fit Teacher
My husband and I bought our home in 2008 just before the market crashed. In spite of our modest incomes as a teacher and a social worker, the whole world was telling us to buy as much house as we could. Friends, realtors and bankers told us over and over again to take out a loan for $350,000, live in the house for two years, then flip it and buy a bigger one.
This idea dumbfounded us. First of all, the mortgage payment on a loan that size would’ve eaten up most of our monthly income. Secondly, it seemed inconceivable that housing prices would keep going up at 7% a year. Third, we had over $110,000 in student loans, and adding that much more debt to our lives seemed very scary. Finally, the whole buying/selling/moving gig just sounded really stressful to us.
So we went against all of the advice and bought an 805 square foot house for $168,000.
Twelve years later we still love coming home to our cozy, peaceful, small home. Our tiny space has allowed us to create a big life full of opportunities we never could’ve imagined, and we have no plans to trade up. Here’s why:
1. Because we stayed small we were able to buy into a nice neighborhood that’s close to both of our jobs. We each have a 10 minute bike ride or a 7 minute drive to work. The average American spends about 27 minutes commuting one way, according to The Washington Post.
Our short commutes free up time each day for us to eat meals together, exercise, decompress, and prepare for the next day. (Angela: 27 minutes is a SHORT commute around here these days! Though I’m lucky to have one that’s just 12 minutes – or an hour if I run to work)
2. It’s really hard to actually lose something in 805 square feet, so we don’t spend a lot of time looking for lost keys or hats. Similarly, everything we need is literally only 1 or 2 rooms away. Gone are the days of “having to go all the way upstairs” to get something.
3. Fewer chores? Yes, please. It takes 40 minutes to clean the entire house, top to bottom.
The carbon footprint of our house is 43% lower than the average 2 person household in our zip code according to the EPA’s Carbon Footprint Calculator. We’re always looking for ways to decrease our environmental impact, and our small house has been an easy way to amplify our efforts.
1. You can only fit so much into 805 square feet. This means we only buy what we really love because there is literally no room for stuff we feel meh about. This goes for furniture, artwork, kitchen tools, clothing, backpacking gear, literally everything we own.
If we buy something to bring into our home, we have to love it more than what we already have because there’s not room for both. The end result is that we hardly buy anything at all, and we’re really comfortable and happy with the things we do have.
2. We remodeled almost the entire home within the first 5 years of living in it. We were able to cash-flow all of the projects because of how small they were. We replaced the windows, but there are only 7.
We put in a granite countertop, but it’s only 8 feet long so we even got a remnant price. We were able to buy eco-friendly flooring because we only needed 250 square feet. The entire roof only cost $2,000.
We put in an on-demand water heater and gained space and energy savings. The end result was that in a relatively short time we got cosmetic upgrades that we loved and energy efficient upgrades that started saving us money right away.
3. We pay less than $100 a month to heat our house in the middle of a Montana winter. In the summer we’re able to cool it off at night by opening the windows and then keeping all the cool air in with energy efficient windows and blinds.
4. A smaller, less expensive house means lower property taxes.
A Whole Lot of Life in a Small House
According to the averages in this infographic, we’re saving $535 a month by having an 800 square foot home instead of a 1600 square foot home. In real life, that extra cash has meant paying off our $110,000 in student loans, cash flowing my Master’s program, maxing out both of our IRAs, my husband’s individual 401k, our HSA, and my 457b.
We’re on track to pay off our mortgage early and we’ve gotten in a few incredible vacations. Our incomes are significantly higher now than they were twelve years ago, and that’s made a lot of our savings possible. But since we didn’t let our housing costs increase when our incomes did, we’ve had a lot more money to pay off our debt and aggressively fund our future.
We are constantly inundated with tv shows and commercials about buying bigger, fancier homes, while the benefits of a small house are almost never publicized. We get led down the path of believing that we need a whole lot of space when we actually might be happier with less. Well, I’m here to speak up for the little house on the block. It may just be the key to a big life.
What size home do you live in? Do you ever get the urge to buy up?